| June 2, 2014 | | | | |  | | | Are You Doing Badly by "Doing Good"? | | | - There's a fundamental question that you need to resolve before you can ever hope to invest your time and money successfully. While there's no "right answer," you will never reach your goals unless you seriously consider where you stand...
- For example, is your aim to do badly by "doing good" -- even if it means missing 80% and 225% gains? Three readers have said that's their goal. If it sounds like you too, we have a follow-up question for you below...
- Then, Part 1 of a 2007 Bill Bonner classique requested by a reader. That same reader compares us to Himmler and seriously misunderstands Bill's insights in one breath...
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| | | | | | | What Are 'They' Hiding From You? This is scary. Nobody in the mainstream media is talking about this. Read more now >> | | | | | | | | Baltimore, Md.
June 2, 2014
 Peter Coyne, prompting you to consider your investment beliefs...
Did we mention last week that you have to make a serious choice before you can successfully invest? Well, you do. And you should make your choice now, before selecting another stock to buy… or before choosing a portfolio allocation… or, if you're a total neophyte, before you even open your brokerage account. Otherwise, you may end up with the cart in front of the horse months from now. The all-important question, dear investor, is will you commit to: 1) Do badly by "doing good"? 2) Do well by doing bad? Or... 3) Do well by doing good? We know those options sounds confusingly Confucian, but each is distinct and important to understand. By deciding which strategy suits you best, you'll be able to use your time and money to meet your personal goals better. You'll also be able to forgo or cash in on hugely lucrative opportunities in the future -- returns like 80% or more. Why would you ever want to forgo 80% returns? Well, if you resolve to do badly by "doing good" -- your first option -- you might gladly eschew 80% returns. | Well, if you resolve to do badly by "doing good" -- your first option -- you might gladly eschew 80% returns. | Doing badly by "doing good" simply means you sacrifice fat investment returns (hence, doing badly) in the name of a greater cause -- like protecting the environment, ending war, eliminating poverty, obesity or whatever good fight you've picked. To fit in this camp, you must to tap into your "C spot" -- that dangerous little corner of your brain where collective thinking occurs. That's the lobe useful in sporting events, cavalry charges and political campaigns. It's essential for reading the editorial pages without laughing, but useless when trying to maximize your investment returns. Take investing in the military-industrial complex as an example. In these pages, we fondly call this "making the empire pay." Since November 2011, we've suggested doing so by putting money into the iShares Dow Jones US Aerospace & Defense ETF (NYSE:ITA). If you got into ITA back then, you'd have spanked the S&P 500 and be up 80%. Yet we know from poring over the mailbag that many reckoners feel squeamish about profiting this way. "The military-industrial complex kills people," reasoned one regular reader two months ago: "If you can live with owning an investment that profits from state-sponsored killing, that's fine. I can't. Do I really need to point out to you that when you own stock in a company that routinely commits criminal acts as a way of doing business, you have a vested interest in their continuing to make money from their criminal actions? "When you invest in the likes of Coca-Cola and McDonald's, you want them to keep selling junk to kids who end up in cancer wards in shockingly large numbers. That's sick. Your argument is just a way to rationalize bad behavior." Or how about the profitable U.S. fracking revolution plays we presented you last week? Our own Byron King and Matt Insley have tipped off picks like MarkWest Energy (NYSE:MWE), which has rocketed 225% since their original recommendation in 2009. Yet those who prefer to do badly by "doing good" don't want to hear it. "I went fossil-free last year," wrote one such reader: "and I'm taking my name off your email list in my continuing search for people with a brain that do give a rat's ass about the environment, rather than the tawdry bands of marauding pirates we see everywhere that pride themselves in stacking 'filthy lucre,' as you say, as though that's what it's all about…" Sheesh… Anyway, you get the point -- this is doing badly by "doing good." You earn nothing, change nothing and get wound up over political debates that you can't affect no matter how right you are. This is also known as being curmudgeonly, stubborn or pigheaded. We put it to you, dear reader -- say you detested fracking or government's warmongering yet still invested in MarkWest Energy or a "merchant of death" like Northrop Grumman. What's the absolute worst that would've happened? Would your investment have added to environmental damage… or more horrific drone strikes? No. Neither company would have more money because of your investment. They wouldn't operate any differently, either. | That means you'd have $22,500 more for every $10,000 invested in MarkWest Energy. | All that would have happened is the same stock, already in existence, would have simply switched hands and you'd have been up 80% and 225%, respectively. That means you'd have $22,500 more for every $10,000 invested in MarkWest Energy. What a terrible crime! Good luck sleeping at night. And for thee more concerned with the environment, think of what you could've accomplished with that money. You might've bought up prime property in shale oil country and refused to allow fracking on it. Or you could've donated $22,500 to Americans Against Fracking. We don't condone either of those choices, mind you, but you'd be well within your rights. Likewise, you're well within your right to sit back and do badly by "doing good." We respect your decision to forgo profits because of your convictions. But be warned you and us have different goals. All we ask is that you politely suffer through our lucrative recommendations that piss you off for whatever reason -- like this reader; "In 1941-42" he strangely asked us via email: "If the Nazi Party had been selling shares, would you have boasted them to your readers? It was, for a while, the most profitable franchise in the world. They were raking in the loot from stolen art, stolen property, looted banks and gold teeth and gold wedding bands from gassed Jews. Would you have said, 'Buy Nazi! We don't care what's going on in Poland. It's not worth our time or attention. We're here to help you make money'? "That morally bankrupt attitude is what has caused all the misery in the world and the violent deaths of at least 100 million people in the last century. Everyone is after money, from the drug cartels of Mexico to the warlords of Sudan. If someone offered you a billion dollars for the life of each of your children, would you take the deal? Perhaps you would -- if there is nothing to you more important than money. You are despicable. "This is not what Bill Bonner would say. Ask him to show you his essay: 'The "Justes" and the Good: More Real Heroes.' I carry a copy of it around with me in my pocket. Now that Bill is semiretired, you moral midgets, with the ethics of a Heinrich Himmler, have taken over and are running the show." Good grief… If you can't tell the difference between us showing you how to turn a buck and selling out your own children, there's probably no help for you. To show you how wrong our reader is, we've chosen to republish the Bill Bonner classique he referenced. It's from 2007 and comes in two parts. As you'll see in Part 1, below, Bill isn't saying anything different than we are. "There are people who do not try to improve the world," affirms Bill, "which is not only hopeless, but also vain and disastrous. Instead, real heroes do what they can to improve the world around them." Read on, write in (peter@dailyreckoning.com) and open tomorrow's email. We still have two more options that we'll explore then… | | | | | | | | |  CLICK HERE NOW | | | | | | | | | The Daily Reckoning Presents... We've often said that we're not here to promote any cause -- except helping you earn the greatest return in the marketplace. You may not personally agree with everything we publish. But we are going to publish ideas that will earn you fat returns -- "filthy" fracking lucre… payouts squeezed from the empire's war machine. If you're concerned about being a hero and changing the world, you're not necessarily in the wrong place. You just might need to rethink your tack. "Real heroes," writes Bill, "do what they can to improve the world around them." Read on... ****************************** | | | | The "Justes" and the Good: More Real Heroes Part I | | | | by Bill Bonner | | | | "If everyone swept his own doorsteps, what a clean world it would be."
-Goethe  There are so many obvious defects with the human character that even a hairdresser would be bored if we began reciting them.
But here we focus only on the two of them we find amusing today: He can't seem to help himself from wanting to use his brain to improve the world, but when he puts himself to work on it, his brain ceases to function. The defect begins to appear, acutely, when the typical Homo sapien reaches his teenage years. That is when his brain is sharp and active, but before it has been put in its place by experience. It still thinks it can solve any problem as though it were long division. In a memoir from his youth, for example, a childhood friend of Adolf Hitler reported that the future Fuhrer would walk through the neighborhood and point out how he would improve things -- change the color of one house…knock the columns off another…raise the roof on a third. But, rather than buy a house and try to realize his architectural ambitions, the young Hitler tried to change the face of the entire world. And here, we bring in another defect -- not of leaders, but of the common man. He is ready to go along with anything. In a few years, Germans were goose-stepping all over Europe, creating havoc and chaos…trying to impose Hitler's clumsy new order. "I remember it," said a man we met yesterday. "I was there. And I wouldn't be here today if it had not been for one of those people we call the 'Justes.'" Yes, dear reader, once again we write not about the many sordid bumblers in our midst, but about the few genuine heroes. Many of them were honored here in Paris yesterday, at a special ceremony at the Pantheon. | Only a few people -- the Justes -- took it upon themselves to interfere. | When the Nazis revealed their plans for world improvement, the Jews discovered that there was no place for them in it. Many fled to France. Then, when the panzers rolled into Paris, they found that they had not gone far enough. The master race, with the active connivance of the French government, was soon rounding up the Jews and sending them back to Germany, either to work in labor camps…or to be exterminated. Only a few people -- the Justes -- took it upon themselves to interfere. "I was only three years old at the time," explained our friend at lunch. "But my mother and father knew that they might be taken any day. We had friends who had a bar/hotel outside of Paris. They offered to take me. It was really very courageous of them, because they probably would have been sent to labor camps themselves -- or even killed -- if I was discovered. And the worst of it was that you had to hide…not just from the Germans, but also from your neighbors, because you never knew for sure who might denounce you to the Gestapo. "So these people took me in and told everyone that I was their grandson…that I had been fathered by their son, who was a bit of a rake, and the mother had run off. If anyone asked me who my parents were, I was supposed to say I didn't know. "For a while, the Germans were camped in the yard of the hotel, with the officers in the rooms. They were actually very friendly. One of them gave me a bar of chocolate. But I was afraid to eat it because my mother had told me that the Germans might poison me. So I gave it to the dog and watched to see what happened. And the dog was fine…so I wished I had kept it for myself. "Those were such funny times. But today, I'm going to the Pantheon. I'm a witness…a living witness…to how some people really do brave and courageous things, even when they have no real reason to. And you know, this is one thing from World War II…and maybe the only thing…we French can be really proud of." | | | | | | |
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A Florida-based computer expert is breaking an incredible story. Perhaps the biggest political story of the next decade. You can view it for free, right here. | | | | | | | | Yes, dear reader. There are people who do not try to improve the world, which is not only hopeless, but also vain and disastrous. Instead, real heroes do what they can to improve the world around them. Here, we honor a couple more of them. In the United States, it costs about $1,650 to perform a cataract operation. You wouldn't expect many such operations in a country such as India, where per capita income is probably less than $1000. But in India today, there are five hospitals that perform more than 180,000 eye operations each year. Each operation costs only about $110. Most of the patients pay nothing. This is thanks to Dr. Govindappa Venkataswamy, who set up his first 12-bed Aravind eye hospital in his brother's home in Madurai, in 1976. At the time, he was already 57 years old. Dr. V set out to be an obstetrician. But he was crippled by rheumatoid arthritis at an early age. He spent two years recovering. Because he could no longer deliver babies, he turned to the study of ophthalmology, and designed special tools that suited his hands. He found that he could do eye operations simpler, faster and much cheaper than they had been done before. The inspiration, he says, comes from McDonald's. He first discovered the golden arches at the age of 55 and it changed his life. "In America, there are powerful marketing devices to sell products like Coca-Cola and hamburgers," he says. "All I want to sell is good eyesight, and there are millions of people who need it…If Coca-Cola can sell billions of sodas and McDonald's can sell billions of burgers, why can't Aravind sell millions of sight-restoring operations…? With sight, people could be freed from hunger, fear, and poverty. | People don't realize that the surgery is available, or that they can afford it, because it's free. | "In the third world, a blind person is referred to as 'a mouth without hands,'" says Dr. V. "He is detrimental to his family and to the whole village. But all he needs is a 10-minute operation. One week the bandages go on, the next week they go off. High bang for the buck. But people don't realize that the surgery is available, or that they can afford it, because it's free. We have to sell them first on the need." The hospital picks up the tab for those who can't pay. Paying customers are charged 50 rupees (about $1) per consultation and have their choice of accommodations: "A-class" rooms ($3 per day), which are private; "B-class" rooms ($1.50 per day), in which a toilet is shared; or "C-class" rooms ($1 per day), essentially a mat on the floor. Paying customers choose between surgery with stitches ($110) and surgery without stitches ($120). Since he began, his eye hospitals have restored the sight of more than one million people in India. Even with such tiny revenues per patient, Aravind makes a profit, with a gross margin of 40%. One operation is completed; another is begun right away. It is apparently a very efficient and productive enterprise. Aravind now does more eye surgeries than any other provider in the world, though it accepts no government grants. The hospitals are totally self-supporting. Nor does Dr. V. try to hustle a profit from the enterprise for himself. He lives on a pension, taking no money out of Aravind. Dr. V. is helping the poor in a big way. But he also helps them in a way very different from the typical world improver. He sees them as individuals. "Consultants talk of 'the poor,'" he says. "No one at Aravind does. 'The poor' is a vulgar term. Would you call Christ a poor man? To think of certain people as 'the poor' puts you in a superior position, blinds you to the ways in which you are poor -- and in the West there are many such ways: emotionally and spiritually, for example. You have comforts in America, but you are afraid of each other." Dr. V set out only to do eye operations…quickly and cheaply. The world improvement came -- as it always does -- as a by-product of private action. In Tamil Nadu state, where his main hospital is located, the incidence of blindness is 20% below the rest of India. Regards, Bill Bonner
for The Daily Reckoning
2007 | | | | | | | | |  Bill Bonner is the founder of Agora Inc. and cofounder of The Daily Reckoning. He is also a three-time New York Times best selling author. | | | | | | | | | BE SURE TO ADD dr@dailyreckoning.com to your address book.
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